CHICAGO • United Airlines and the passenger who was dragged from a Chicago flight earlier this month have reached a settlement for an undisclosed sum, they said, in the carrier's latest step to contain damage from an incident that sparked international outrage.

Viral videos of Dr David Dao being dragged down the aisle of a United jet as well as chief executive Oscar Munoz's handling of the incident also prompted calls from congressmen for new industry regulations, and led United's board of directors to reverse an agreement to make Mr Munoz company chairman next year.

United said on Thursday that it would offer passengers who give up their seats up to US$10,000 (S$14,000), reduce overbooking of flights and no longer call on law enforcement officers to deny ticketed passengers their seats.

Southwest Airlines said on the same day that it would end overbooking of flights.

Dr Dao, a 69-year-old Vietnamese-American doctor, was injured when Chicago aviation police removed him from his seat and then dragged him from the plane to make space for four crew members on the flight from O'Hare International Airport to Louisville, Kentucky.

United has taken "full responsibility for what happened on Flight 3411, without attempting to blame others, including the City of Chicago", Mr Thomas Demetrio, Dr Dao's attorney, said in a statement. He added that there was no need to proceed with separate litigation against the city.

The three Chicago Department of Aviation officers who pulled Dr Dao off the plane and a supervisor involved in the incident remain on paid leave, said the department's spokesman Karen Pride.

REUTERS